Coway

Coway began as a visit-managed rental business built on water purifiers, air purifiers and bidets, and has widened its lineup across the home to beds, massage chairs and air conditioners.

In Korea, recurring care service delivered by its Cody field organization is central to account retention, and with BEREX M and R series products combining massage functions plus new categories such as wall-mounted air conditioners and food waste disposers, total domestic accounts have passed 8.04 million (7.72 million rental and 310,000 membership).

Its sleep and healing care brand BEREX has become a second pillar since the company entered mattress rental and care services in 2011 and launched the brand in December 2022.

Late last year it released the BEREX Core Set and Massage Set, medical devices certified by the Ministry of Food and Drug Safety, and early this year it launched Terasol, a home medical device brand, extending into healthcare-adjacent areas.

Overseas, Malaysia is the core market: first-quarter overseas accounts totaled 4.34 million, up 11.5% year on year, with Malaysia accounting for roughly 75% of overseas revenue.

Subsidiaries in the United States, Thailand, Indonesia and Vietnam complete the footprint, and Indonesia and Vietnam, with first-quarter revenue of KRW 12.6 billion and KRW 1.4 billion respectively, are managed for steady rather than rapid growth.

On the manufacturing side, its bed affiliate reported second-quarter revenue of KRW 53.2 billion (+52.5%) and operating profit of KRW 3.8 billion (+68.3%).

In the competitive landscape, Coway is the leader in home appliance rental, the SK affiliate's cumulative domestic accounts are reported at around 2.38 million, and LG Electronics bundles purifiers, air purifiers, styling closets and massage chairs into subscription models.

From a credit analyst perspective, Coway has been assessed as holding a firm market position and brand recognition that should keep share gains intact with limited impact from rising competition.

On an annual basis, revenue rose for four straight years from KRW 3,856.1 billion in 2022 to KRW 3,966.5 billion in 2023, KRW 4,310.1 billion in 2024 and KRW 4,963.6 billion in 2025, while operating profit expanded from KRW 677.4 billion to KRW 878.7 billion.

The operating margin, however, eased in the most recent year at 17.6% in 2022, 18.4% in 2023, 18.5% in 2024 and 17.7% in 2025, while net profit attributable to owners grew from KRW 458.2 billion to KRW 617.7 billion.

Quarterly, fourth-quarter 2025 operating profit of KRW 181.6 billion stood clearly below the surrounding quarters (KRW 243.1 billion in the third quarter of 2025 and KRW 250.9 billion in the first quarter of 2026), pointing to year-end cost recognition patterns.

In 2026, revenue stepped up sequentially with KRW 1,329.7 billion of revenue and KRW 250.9 billion of operating profit in the first quarter, followed by KRW 1,442.2 billion and KRW 253.2 billion in the second.

Second-quarter revenue grew 14.6% year on year but operating profit rose only 4.3%, taking the margin from 19.3% in the second quarter of 2025 to 17.6%; one calculation holds that excluding a one-off receivable impairment of KRW 11.45 billion tied to the completion of a subsidiary's bankruptcy proceedings, the underlying margin was about 18.4%.

Net profit attributable to owners was KRW 178.3 billion in the second quarter versus KRW 155.6 billion a year earlier, and first-half net profit attributable to owners rose 22.4% to KRW 360.3 billion, helped in part by foreign exchange related gains from currency moves.

On the balance sheet, total liabilities grew to KRW 3,386.4 billion at end-2025, lifting the debt-to-equity ratio from 80.3% in 2024 to 93.7%, with equity at KRW 3,613.7 billion.

Notably, cash flow from operations fell from KRW 448.9 billion in 2023 and KRW 330.3 billion in 2024 to KRW 35.5 billion in 2025, a sharp contrast with reported earnings, and investment needs for acquiring rental accounts and greater variability in revenue and profitability from wider use of finance-lease sales have been cited as industry risk factors.

Given that rapid account additions come with heavier upfront investment, cash flow line items warrant separate monitoring.

Korea's rental industry began with water purifiers and has widened into mattresses, massage chairs and kitchen appliances, sustaining growth through category diversification inside a maturing market.

The water purifier rental market is estimated at around KRW 3 trillion, of which roughly KRW 600 billion comes from ice-making purifiers, so the shift to premium lines drives each player's average revenue per unit.

The axis of competition is also shifting, with the view that account count rather than unit sales has become the key competitive metric as rental has expanded across mattresses, air purifiers, dishwashers and massage chairs.

In mattresses, rising hygiene awareness and mattress rental demand made Coway the top player in Korea's mattress market by revenue last year, and its domestic bed revenue of KRW 365.4 billion last year exceeded Simmons Korea at KRW 323.9 billion and Ace Bed at KRW 317.3 billion.

At the same time, there is the counterpoint that penetration for most home appliance categories appears saturated even as more players enter, intensifying competition.

Overseas, the common framing is that rental operators went abroad as the domestic market matured, and Malaysia, with relatively high GDP per capita, is where major players have settled successfully.

The same report also lists lower profitability of overseas operations versus Korea and receivable collectability as risks, so a rising overseas mix raises both growth and collection exposure.

Whether subscription pushes by large appliance makers overlap materially with rental categories or mainly intensify the account race remains a point of disagreement.

For the second half, management said it will strengthen leadership in the premium segment and accelerate growth drivers from product portfolio diversification.

Its regional plan was framed as building competitiveness in Korea around BEREX sleep-tech and premium lines, while sustaining Malaysian momentum and settling newer markets such as Thailand, Indonesia and Vietnam.

As an earnings baseline, company guidance for this year's operating profit is KRW 920 billion to KRW 955 billion, while the FnGuide consensus stood at KRW 1,013.3 billion of operating profit and KRW 5,696.7 billion of revenue as of August 2026, above the top of guidance.

Medium-term targets in its value-up plan include exceeding KRW 5 trillion in revenue by 2027, a 40% shareholder return ratio, keeping net debt to operating profit within 2.5 times, and governance upgrades, with that leverage metric reported at 2.1 times for 2025.

Thailand is cited as a candidate new growth pillar, as its second-quarter operating profit rose 69% year on year to KRW 1.8 billion, prompting optimism about a Malaysia-style J-curve.

On the brokerage side, analyst Lee Jin-hyup of Hanwha Investment and Securities said on August 10, 2026 that he raised his target price for Coway from KRW 150,000 to KRW 160,000 while maintaining a buy rating.

Still, because much of the first-half growth leaned on account additions and early revenue recognition in new categories, marketing cost control and account retention remain the swing factors for margins in the second half.